Photo by: Bloomberg
PERTH (miningweekly.com) – Iron-ore miner Atlas Iron has deferred the development of its Corunna Downs mine, with the miner instead aiming to increase production from the Mt Webber operation.
Atlas in February approved the development of the Corunna Downs project, with capital costs estimated at between A$47-million and A$53-million. The project had been slated to deliver four-million tonnes a year of lumps and fines direct shipping ore over an initial five- to six-year mine life, with first product shipments targeted for the March quarter of next year.
However, Atlas told shareholders on Wednesday that the company had deferred the Corunna Downs development, owing to the prevailing market conditions, and the approvals process taking longer than expected.
The deferral would allow Atlas to further derisk the project in anticipation of improved market conditions, MD Cliff Lawrenson said.
Instead, Atlas would look at an upgrade of the Mt Webber operation, increasing production from seven-million tonnes a year to nine-million tonnes a year, with the incremental production processed at the recommissioned Mt Dove site.
Lawrenson said that the Mt Webber upgrade was a low-cost option for the company that retained productive capacity without major capital expenditure, and that the recommissioning of the Mt Dove plant and expanding Mt Webber’s production would deliver a range of economic and production benefits.
“Utilising the Mt Dove crusher will enable Atlas to add two-million tonnes a year of production at very low capital intensity in a short period of time,” Lawrenson said.
“This enables us to achieve operating cost benefits and to maintain our 2017/18 production at levels that we would have expected prior to deferring Corunna Downs. Corunna Downs remains an important project for the company to sustain its production base and we will proceed with its development when market conditions improve”.
With mining at Abydos scheduled to end in October 2017 and the additional production at Mt Webber set to ramp up by August 2017, Atlas’s production guidance for 2018 is between nine-million and ten-million tonnes.